Today, the Council approved a comprehensive set of fresh regulations targeting money laundering and the financing of terrorism within the EU. These measures aim to safeguard both EU citizens and the integrity of the EU’s financial system.
The newly enforced stringent rules will fortify our anti-money laundering and counter-terrorist financing efforts. A newly established agency, headquartered in Frankfurt, will oversee the activities of relevant stakeholders, ensuring that criminals, organized crime, and terrorists find no refuge in legitimizing their illicit gains through financial channels.
Vincent Van Peteghem, the Belgian finance minister, expressed his support for the new regulations, highlighting that they streamline and reinforce anti-money laundering protocols across the EU. By consolidating rules into a directly applicable regulation and a directive governing national competent authorities, the package closes existing loopholes that benefit fraudsters.
The regulation introduces comprehensive harmonization of anti-money laundering measures across the EU for the first time, leaving no room for exploitation by criminals. It broadens the scope of obliged entities to include sectors like cryptocurrency, luxury goods traders, and sports clubs and agents. Additionally, it imposes stricter due diligence requirements, regulates beneficial ownership, and caps cash payments at €10,000, among other provisions.
The directive aims to enhance the coordination and effectiveness of national anti-money laundering systems, particularly regarding financial intelligence units (FIUs) and supervisors.
The establishment of the European Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) grants it direct and indirect supervisory authority over high-risk entities in the financial sector. This centralized authority will enhance the efficiency of the AML/CFT framework by collaborating closely with national supervisors to ensure compliance.
To enforce compliance, the AMLA is empowered to impose monetary sanctions on obliged entities found in serious, systematic, or repeated breaches of regulations.
Furthermore, the directive mandates EU member states to provide access to information from centralized bank account registers to national law enforcement authorities via a single access point, enhancing efforts to combat criminal activities and trace illicit proceeds.
The adoption of these regulations marks the final step in the approval process. They will soon be published in the EU Official Journal and take effect accordingly. The AML regulation will become operational three years after entry into force, while member states have varying timelines for transposing the AML directive.
AMLA is scheduled to commence operations in mid-2025, headquartered in Frankfurt.
These regulations stem from the Commission’s legislative proposals presented in July 2021, aiming to bolster the EU’s AML/CFT framework. The package encompasses regulations on establishing AMLA, revising fund transfer regulations, imposing AML requirements on the private sector, and directing AML mechanisms at the national level. Additionally, a separate directive ensures the provision of a single access point for law enforcement authorities to centralized bank account registers.
By FCCT Editorial Team
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